Korean Conglomerates Shift to Internalize Power Amid Surging AI Demand
Major Korean conglomerates, including Samsung, POSCO, and SK, are exploring direct power generation and infrastructure development. This strategic shift, driven by a projected 26.8 GW increase in peak electricity demand by 2040, aims to secure stable and cost-effective power for AI, semiconductor, and decarbonization initiatives.
Our take
Will AI and semiconductor demand open Korea's power market to corporate self-supply and nuclear PPAs?
Not yet: the corporate plans are at review stage, and the rules that would let a company supply its own sites or contract nuclear power long term do not exist, so demand growth alone does not open the market; that needs rule changes which so far are industry requests, not proposals.
The pressure is real: the reported upward revision of 2040 peak demand and the years needed for new grid give large users a reason to secure supply directly. Against that, the Electricity Business Act generally bars users from buying from the market directly, and the direct-trading rules cover renewable electricity only. The balance turns on whether PPA scope is widened beyond renewables; if it is, corporate buyers would gain an alternative to renewable PPAs.
What the source says
- Samsung Samsung is considering establishing a dedicated power generation subsidiary and is reviewing its organizational structure and staffing.
- Samsung Electronics Samsung Electronics is recruiting energy policy experts from the Ministry of Trade, Industry and Energy and power system personnel from Korea Electric Power Corporation (KEPCO).
- POSCO Group POSCO Group is demanding the introduction of a Power Purchase Agreement (PPA) system to allow long-term purchase of Small Modular Reactor (SMR) power.
- POSCO Group POSCO Group is also considering large nuclear power plant construction with private capital.
- POSCO E&C POSCO E&C is pursuing technology cooperation with Korea Electric Power Engineering Company (KEPCO E&C) on SMR and 4th generation nuclear reactors.
- SK Telecom SK Telecom is building power infrastructure, including substations, linked to its data center business through SK Hyper.
- The 12th Basic Plan for Long-term Electricity Supply and Demand revised its 2040 peak electricity demand forecast upwards by 26.8 GW in four months.
- Current domestic electricity market regulations restrict companies from freely supplying self-generated power to their own facilities or entering long-term contracts.
- An industry official states that actual business implementation depends on economic viability, permits, and electricity market system improvements.
- Electricity Business Act Article 32 generally prohibits electricity users from directly purchasing power from the electricity market, with exceptions for large consumers.
- The Direct Transaction Notice sets practical rules for direct renewable electricity transactions.
For investors — Corporate buyers: for new sites, the available routes today are utility supply, direct market purchase where eligible, and renewable PPAs; supply from nuclear or from self-owned plants to own sites remains a policy request, so do not plan on it.
Solar and wind developers: large industrial buyers are building in-house power teams; expect more demanding PPA counterparties, and watch whether PPA scope is widened, which would add competing supply.
Lenders: treat conglomerate generation subsidiaries as early-stage; their structure is still under review.
Watch: Government or industry proposals for amendments to the Electricity Business Act or Direct Transaction Notice to expand PPA eligibility or clarify corporate self-supply regulations.
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